BUSINESS AND BUSINESS ENVIRONMENT INTROUCTION 3 MAIN BODY

BUSINESS AND BUSINESS ENVIRONMENT INTRODUCTION 3 MAIN BODY3 L O 1 3 P1) Types and objectives of organizations.3 P2) Size and importance of organizations. 6 L O 3 9 P4) Impact of macro environment on business operations. Business environment can be defined as a combination of internal and external factors which are consists of employees, clients, suppliers, trends etc and affect the company directly or indirectly.

BUSINESS AND BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
L O 1................................................................................................................................................3
P1) Types and objectives of organizations.............................................................................3
P2) Size and importance of organizations..............................................................................5
L O 2................................................................................................................................................6
P3) Relationship between organizational functions...............................................................6
L O 3................................................................................................................................................9
P4) Impact of macro environment on business operations.....................................................9
L O 4..............................................................................................................................................11
P5) Internal and external analysis of the organization.........................................................11
P6) Interrelationship between strengths, weaknesses and macro environment factors........13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Every business works in an environment which is full of uncertainties and which directly
impacts on profitability and productivity of the company. Business environment can be defined
as a combination of internal and external factors which are consists of employees, clients,
suppliers, trends etc and affect the company directly or indirectly. This environment helps the
business in identifying opportunities and utilizing and capturing essential resources which can
assist it in planning, and can improve overall growth of the business. It can help the businesses in
achieving profitability of the company. This report will take three different kinds of organization
for better understanding of the topic and to see how different organization work in same
environment.
The report will take Asda, British business bank and Cancer research UK. The report will show
different types and purposes of organizations. However, it will include size and scope of
different kinds of organization. It will show different organizational functions and their relation
with achieving objectives for the company. Moreover, the report will lay emphasis on positive
and negative impact that the macro environment can create on business operations. It shows
internal and external analysis of Asda in order to find out its strength and weaknesses. At last, it
will focus on strength and weakness which will interrelate with external factors.
MAIN BODY
L O 1
P1) Types and objectives of organizations.
There are different types of organisation that vary from each other in the context of
management, number of employees, capital introduced, revenue generated etc. These can be
private, public or voluntary organization.
Private organization – These organizations are owned by individuals and are also known
as for profit organization. Their main objective is to earn profit and maximize it over the years.
These organizations benefit the owners, investors and shareholders (Hamilton, 2018). The
employees in private organization are less secured than that of public companies. In this type of
organization, there is no government intervention unless and until the company is involved in
misconduct or fraudulent activities.
Public organization – These organizations are owned by government and provides goods
and services to customers for commercial purpose. They provide goods and services in

comparatively low prices than that of private sector. They are operated with the money that is
raised by the government from taxes. The organization of public sector do not run for the profit
motive but for the purpose of providing services to the citizens and for the welfare of the society.
(Deasy, and et.al. 2016). Each country has different method of funding for public services. The
public sector includes education, fire services, electricity, healthcare, etc.
Voluntary organization –These type of organizations are created to provide benefit to the
society. The purpose is to enrich the society with no or little government intervention. The
motive of such organization is not profit motive (Gerrish, 2016). The money raised or earned by
an organisation is usually invested back in the organization for the welfare of the society. It is
different from public organizations yet some voluntary organizations are tightened with
government on all levels to support the programs delivery and services. It includes charitable
funds, foundations, community groups social welfare organizations etc.
The different examples of these organizations and their purpose and objectives are :
Asda – Asda is a privately owned company which is a British supermarket retailer which
deals in general merchandise, grocery and financial services. It is a subsidiary of Walmart. The
purpose of Asda is to earn profit by giving tough competition to its biggest competitors that is
Tesco. It was founded in 1949 by peter and Fred Asquith (Quinlan, and et.al., 2019). The main
objective of the company is to increase its market share and to expand its operations all over the
world so that it can increase ts sales and profit. It has around 165,000 employees but as the
employment in private organizations is not that secure, Asda also had to shut down few stores
which took away the jobs of people. The revenue generation of Asda is £21,666 million and have
subsidiaries like Asda mobile and Asda money.
British Business Bank- It is a public limited organisation which was established in 2014.
it's headquarter is situated in Sheffield, UK. The purpose of the BBB is to increase the credit to
small and medium enterprises along with providing advisory services. It is owned by department
of business, energy and industrial strategy. It works under financial services investments
(Gorman, 2019). Thus bank do not lend the loans to SMEs directly but instead work with other
financial institutions to increase their accessibility to funding. Its main objective to uplift the
SME sector of the society. The active employees working for BBC is more than 300 employees
who look at various functions like finance and central function, HR, legal functions etc.

Cancer research UK - It is a type of voluntary organization which is a cancer research
and awareness charity of UK. It was created in 2002. The purpose of voluntary organisation is to
do welfare and up liftment of the society in terms of health, partiality, racism etc. The
registration number of CR UK is 1089464 (Banerji, and et.al, 2018). The objective of this
organization is to reduce the number of deaths that happen from cancer. The number of
employees work for this organization are 3,964 and volunteers are 40,000 who work for the help
of organization in their free time. The revenue generated is 634.81 Million Euro. It is again
invested for the welfare of the society and cancer patients and the cycle continues (Manetti and
et.al., 2018).
P2) Size and importance of organizations.
There are mainly three types of organizations such as private, public and voluntary whose
size and scope are being described as follows:
Private limited organization: Private organization generally operate their business at
small scale. As per the company law there is a requirement to employ minimum 2 and maximum
200 employees. Private organizations is owned and run by single person. For example, ASDA
that is a British supermarket retailer. It was 2nd largest supermarket chain in Britain by market
shares. This business entity has more than 630 locations where it operates and provides services.
It has 165,000 employees at all their locations. An estimated revenue of ASDA supermarket is
£21,666 million and operating income is £791.7 million (Maier, 2016). It has total 25 distribution
depots all over the UK that helps them by distributing their products across the network of stores.
Public limited organization: Public organization offers different types of services to
public and the size and scope can be defined by their type and range of services. This type of
organizations require employing minimum 7 employees as per the company law and there is no
limitation of maximum number of employees. But public organization require appointing at least
2 directors (Nowy and et.al, 2015). For example, British business bank that is state owned
economic development bank. It works for people and SMEs as it provides credit services to
small & medium size enterprises. It works with over 120 partners. It targets its assistance to
those companies who have a turnover of up to £25m.
Voluntary organisation: The voluntary organisation need a registration number and it is
a unique code which is allotted to all the charitable trusts for smooth working of operations. It
can be created by four legal frameworks which are unincorporated association, charitable trust,

charitable incorporated organisation and company limited by guarantee. The structure depends
upon members that vote. The rules that affect trustees are payment of trustees which need not be
done in order to provide benefit to the society. Charities must keep records which need tom
include all the charitable activities and finances. The Cancer research UK's motto is together we
will beat cancer and is type of charitable organisation. The key people are Michelle Mitchell and
Charles Swanton (An, and et.al., 2019). Earlier it was known as Imperial cancer research fund
and have 3964 employees with 634.801 million euro generation of revenues. It is entirely funded
by public and raises money through donations, legacies and partnerships with corporate. This
organisation has regular 40,000 volunteers ready to work anytime.
L O 2
P3) Relationship between organizational functions.
Organizational functions -
Organizational functions refers to the different types of activities or procedures that are
performed by peoples that are working in different departments of the organization is known as
organizational functions. These functions are performed in the organization so that, it can
develop and sell products or services to targeted segment of customers. All the departments of
Asda works in collaboration with each other. So that, the aims and objectives of the firm can be
achieved. Different types of functions that are being performed in Asda and interrelationship
between them are as follows -
Research and Development -
Research and development is one of the important function of the organization. It helps
the company to develop innovative products or services by determining the needs of targeted
segment of customers. Research department of Asda plays an important role in development of
new products. It collaborates with other departments like production, finance department etc.
Research and development department helps production department to produce units on the basis
of demands of buyers.
Production -
Production of goods is an important function of Production department of Asda. It plays
an important role in developing products to satisfy the needs of targeted customers. Production
department of the company helps sales department by producing required number of units so

that, sales department can offer the products to ultimate buyers. Marketing department helps
production department by providing information regarding change in taste of customers.
Marketing -
Marketing of products or services is an important function of marketing department of
Asda. It helps to create awareness regarding the products of the organization. Marketing
department of the company provides valuable information regarding targeted buyers, customer
behavior, change in taste etc to production department. It helps to develop products according to
preference of the buyers. Finance department provides information in respect of budget of the
firm that helps in controlling the expenses on marketing of products of Asda.
Human Resource Management -
Human Resource Department of Asda is responsible for managing the human resource of
the organization by performing various managerial functions such as recruitment, performance
appraisal etc. Human Resource Manager of Asda helps in recruiting the staff for other
departments of the firm such as marketing, production etc.
Finance -
Finance department of Asda plays is responsible for developing budgets related with
different functions of the organization such as production, sales, marketing etc. Production, Sales
department of the firm have to work in collaboration with Finance department so that, they can
ensure that sufficient funds are available with company for conducting marketing and
distribution activities for the products of the firm.
Advantage -
Collaboration between different functions such as Marketing, Human Resource helps to
perform the functions in effective way and results in achievement of organizational objectives.
Disadvantage -
One of the disadvantage of interrelationship between different functions of the firm is
that, sometimes it may result in miscommunication between various departments. Sometimes, it
may be possible that there is lack of coordination and cooperation between different fucntions of
the departments.
Organizational Structure -
Organization Structure of an organization describes the way in which different activities
of the firm will be performed by the people that are working in the company. This will help to

achieve the aims and objectives of the organization in effective manner (Nohria, 2017). These
activities include allocation of work among employees, directing the actions etc. There are
various types of organizational structures that can be followed by a company such as Functional,
Divisional, Matrix etc. Asda follows the following Organizational structure -
Functional Organizational Structure –
Fi
Figure 1 : Functional Organizational Structure
Source : (Functional Organizational Structure, 2015)
It is one of common type of organizational structure. The structure helps Asda to evaluate
the reporting relationship between employees and superiors. Whole company is divided in
various groups on the basis of different functions such as Finance, Human Resource, Marketing
etc. Employees are accountable towards the Manager of the department in which they are
working. Functional Organizational Structure helps to improve the efficiency in operations of
Asda because, employees are assigned a separate department on the basis of their knowledge and

skills. The major advantage of functional structure is that it promotes clear line of authority in
the company.
L O 3
P4) Impact of macro environment on business operations.
Macro Environment -
Business Environment consists of various factors and forces that impacts the operations
of the organization directly or indirectly. Macro environment refers to the external environment
in which company performs its business. Firm cannot fully control the impact of macro factors
on its business. The success of the firm depends upon the ability of implementing the changes in
the company according to the macro factors.
PESTLE analysis –
It is a framework for analyzing the impact of various factors of macro environment on the
operations of the business. It is the most important tool for strategic planning as it is help to
evaluate all the macro environment factors that affect the business efficiency as it include
political, economic, social, technological, legal and environmental factors (Erasmus, Strydom,
J.W. and Rudansky-Kloppers, S. eds., 2016). As by identifying all the external factors it will help
to run the business in long term basis. Management of Asda will perform PESTLE analysis for
identifying the changes that are occurring in Macro environment that can affect the operations of
the company.
Political-
Political environment refers to the factors that may impact the business of the company.
Political environment may create positive or negative impact on the operations of Asda. It
includes actions of Government at local, national or international level. The decisions of
Government affect the choice of market it will enter to sell its products or services t the
customers. There are various political factors that can affect the operations of firm such as
regulations of political party, stability in political environment of the country etc.
One of the most important political factor that has impact the business is Brexit, The
policy of Government of the country regarding rate of tax on goods and services has also
affected the profitability of Asda.
There is stability in political environment of UK that helps the firm to perform the
operations in effective way. Therefore, it has created a positive impact on operations of Asda.

Economical-
There are various economic factors that can affect the operations of the company. There
are various economic factors that can impact the growth and success of Asda are level of
unemployment in UK, growth in GDP of the country, economic development of UK , rate of
inflation, rate of interest etc. The level of unemployment is low in UK therefore, skilled
workforce is available to Asda for performing various activities. This will create a positive
impact on the performance of the firm. In year 2018, the minimum rate of wages for workers has
been increased by the Government by 4.4% (Kapur, 2016).
This has negatively affected the profitability of Asda. This has increased the cost of
operations for the firm. Company should make efforts for developing new pricing strategies so
that, it will help to improve the profitability of the firm.
Social-
Social environment involves various factors that can indirectly affects the operations of
the company. Social factors includes beliefs, values, various demographic factors related with
buyers such as lifestyle etc. These factors play an important role in smooth functioning of a
company. Culture, religion of people living in society also impact the success and growth of the
organization.
Asda should consider the changes in taste and preference of the customers to develop
innovative products in the market. It will also help Asda to develop strategies for growth and
development of the firm. For example - Customers are becoming more health conscious.
Therefore, it is an opportunity for Asda to develop and offer organic products. This will create a
positive impact on the sales and profits of the company. Trends of buying is changing therefore,
firm should invest for providing all the products to customers at one place.
Technological-
Nowadays technology is growing very fast and also have brought many opportunities for
Asda. It impacts Asda in positive manner as it has developed the trends and introduction of
online shopping which help the customer in saving their cost and time. And also it helps to offer
many home delivery (Islam, F.R. and Mamun, 2017). The second positive impact is that its self-
service points have provided convenience for customers which will help to reduce the labor
costs.

It impacts in negative manner as it pressurize the employees of Asda to bring constant
change and innovative products and services in order to gain competitive advantages.
Legal-
Government policies, rules and regulation impact directly the performance and efficiency
of Asda. There are many policies and rules which has to be followed by the company as the
positive effect is that Asda cannot dismiss an employee in partial manner and also can not pay
less to an employee as it will help the company to build positive image in front of customers.
It also causes negative image if the policies and regulation are not in favor of company
that it will affect the working of Asda. As there are various code of practices which are
introduced which has banned the current practices as it has changes prices without notice from
suppliers.
Environmental-
Many people are very aware of the impact business have on environment. As it is very
crucial for Asda to work in the environmental friendly manner as by minimizing wastage and
reusing them in effective manner. As also it is very important to fulfill the corporate social
responsibility which will impact in positive manner as it will increase the brand image of the
company as by creating employment opportunities (Fineman, 2017).
L O 4
P5) Internal and external analysis of the organization.
I Internal analysis refers to analyzing the competencies of the company, financial position
and viability in respect of competition in the market. External analysis refers to analyzing the
factors that are existing in external environment of the business. It helps the company to analyze
the opportunities that are existing in the market that can helps the firm to improve the level of
profitability of the company (Charter, 2017).
SWOT Analysis
It is basically a strategic management tool which helps to identify the micro factor which
include strength, weakness, threat and opportunities. ASDA is the leading organization and it has
various strength that enable the company to make strong and unique position in the market
(Chang, 2016).
Strengths

The first and foremost strength is that it has strong dealer community as it has built a
culture among distributors and dealers which not only promote the products of the company but
also invest in training and development in which it provides training to the sales team in order to
explain the customer about the product and maximum benefit from it so that it helps to increase
the sales of the company. It has successful track record which attract number of customers as it
always comes up with the innovative ideas and creative skills which help ASDA to build unique
position in the market. The company has strong brand portfolio as it has invested in building a
strong brand portfolio which helps the company in expansion into new products categories.
In addition, ASDA has high skilled workforce as it provides excellent training and
development as it invest huge amount in training the employees which helps the company to
increase its productivity and also motivate them to achieve more. It also invests in research and
development in order to bring innovation ideas so that to gain competitive advantages. ASDA
has strong loyal customer base which stick to the brand as it helps the company in increasing the
sales as it gives priority to satisfy its customers.
Weakness
ASDA has to work on the various weakness in order to work in effective way. The first
weakness is that the company is not able to tackle the challenges in the positive manner. The
second weakness is that it invests less in new advance technologies as compare to its competitor
as by investing more in the technology it will help ASDA to bring innovation.
Also ASDA has limited global presence as compare to its competitor. Also, has the
ability to sell the prices have restricted their entrance is few countries as the country fear a
competitor with local vendors. And also ASDA has high labor turnover as compare to its
competitor as it does not spend large amount on its training and development.
Opportunity
There are many opportunities for the company which helps to give new door for
expansion and diversification. The various policies can impact the business in the positive
manner as it will help ASDA in increasing the profitability and sales. The second opportunity is
that the new trends in the consumer behavior can help the company to new emerging market. As
a result, it provides opportunity to expands its products portfolio which will enhance the sales of
the company. Also, by developing new environmental policies will help ASDA in gaining the

market share in the new product category. (Camillus, 2016). Also, by developing new
environmental policies will help Asda in gaining the market share in the new product category.
The demands of buyers have been changing towards the products, and they are becoming
more health conscious. Therefore, it is an opportunity for the company to diversify its business
by offering new products or services to the buyers. This will help to improve sales and revenue
of Asda. Asda has strong Financial Resources that will help the firm in grabbing emerging
opportunities in the market by investing in advanced technology for producing and distributing
products to the customers.
Company should invest funds in marketing of products or services on social media platforms
such as Facebook, Instagram etc. This will help to create awareness regarding the products or
services of the company. This will help to increase the sales and profits of Asda.
Threats
There are many threats which need to be overcome by the company. The first threat is
that the company has shortage workforce in certain global market which represent threat to
steady growth of profit for Asda in those market. The second that is that the rising price of raw
material which will result in rising pricing of the product which will decreases the sales of the
company as a result customer might switch on another brand.
In addition to the company is operating in numerous countries as it is exposed to currency
fluctuations and also the liability law of different country is different so the organization has to
exposed to various liability claims given modification in policies in those industries. The next
threat new entrants as they will provide new products in low prices so customer might change the
brand due to new entrants (Burstein, 2019).
P6) Interrelationship between strengths, weaknesses and macro environment factors.
Micro environment involves internal factors that directly affects the performance of a
company such as strengths and weakness of the organization. Macro environment consists of
organization. Strengths and weaknesses of an organization is interrelated with the factors that are
existing in external environment in which the company is existing. Management of Asda will
identify these factors with the help of analysis of macro factors. Micro factors can be evaluated
through SWOT analysis (Bah, E.H. and Fang, 2015). Rules and regulations of Government may
increase the weakness of Asda. Analysis of macro environment helps the firm to overcome these
barriers that may act as hurdle in success of the organization.

Economic factors that are existing in environment outside Asda such as tax rate, rate of
inflation, wage rate etc. One of the strength of Asda is that it has strong financial resources.
Therefore, if rate of inflation or rate of tax in UK increases, the pricing strategy of the firm will
not affect in negative way. Asda have to follow the regulations of Government related for
environment protection, continuous changes in technology is one of the factor of technological
environment. If Asda is having skilled and talented workforce then it can easily comply the
government regulations. Firm must have talented workforce that will helps to implement new
technology for production or distribution of goods or services.
Strengths of Asda will play an important role in fulfilling the responsibilities towards the
society, customers, environment and other stakeholders of the company through CSR activities
(Andersson, Forsgren, M. and Holm, 2015). It will result in improvement in reputation of the
company and also leads to growth and success of Asda. Social environment includes factors like
customers are becoming more health conscious. If, Asda is having financial resources, skilled
workforce then it can easily develop and launch new products in the market. This will also help
the company to gain competitive advantage over competitors.

CONCLUSION
The report concluded purpose and objectives of three kinds of organizations which were
private, public and voluntary organization. Each of this organization has different purpose and
way of working. The report showed objectives of different kinds of organizations. It concluded
scope and sizes of organizations. It showed how different functions of Asda are interrelated with
each other like how finance function is related with HR and helps it in estimating budget of
recruiting the candidates etc. However, it showed functional organizational structure of Asda for
clear understanding of authorities and its framework.
It summarized how macro factors affects the business with the help of pestle analysis that
includes political, social etc factors which are consists of CSR, competition, economies of scale
etc. These factors either positively or negatively affect the business operations of the company.
Moreover, the report summed up with analyzing internal factors by swot analysis that can impact
the business operations. At last the report summed up the relation between internal and external
factors which will help the business in getting better understanding of how these factors are
related and impact the business.

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